“Achieving Synergies among ASEAN Member Countries toward Sustainability of Islamic Financial Developmet”
PLACE AND DATE
Date : 28 February – 4 March, 2017
Place : International Islamic University Malaysia (IIUM), Kuala Lumpur, Malaysia
Islamic finance is going global. As an important part of Islamic economics, Islamic finance established as an alternative financing to conventional interest-based financial system. In just four decades, Islamic financial system has evolved into a comprehensive financial system, ranging from banking, capital market, insurance, microfinance to pawn shop. Based on Islamic Financial Services Industry Stability Report 2015, the global Islamic finance industry has experienced robust expansion, evidenced by its assets double-digit compound annual growth rate (CAGR) of 17% between 2009 and 2013. The industry’s assets are estimated to be worth USD1.87 trillion, having grown from USD1.79 trillion at 2013.
The growing is accompanied with the claims that Islamic finance is relative resilience during financial crises to conventional finance. The inherent feature of Islamic finance is considered to be reason why Islamic financial institution is not collapsed at the time of crisis. This condition leads Islamic finance is getting trusted not only in muslim-majority countries but also in muslim-minority countries. Also instead of restricted in the middle east region, Islamic finance developed in the widen area.
In Southeast Asia (ASEAN), Islamic finance becomes one of the sectors which have possibility to grow. Although at this time, the development of Islamic finance in ASEAN is mostly contributed in muslim-majority ASEAN countries, Malaysia, Indonesia and Brunei Darrussalam. However, looking ahead ASEAN as a home of seventh largest economy in the world with share of GDP is predicted about USD3 trilion by 2017, any possibilities that Islamic finance will be broaden as well.
Malaysia, currently, leads to others ASEAN countries, even the world, by the number and market share of Islamic finance in its financial system. By 2015, Malaysia has 16 full-pledged Islamic banks with the total of Islamic banking assets reached USD135 billion. Market share of Islamic banking in Malaysia accounts for 21.3% of the country’s total banking assets. Islamic banking assets are forecast to account for 40 percent of the banking sector by 2020. Meanwhile in Indonesia, with about 210 million muslim, is likely to be the next major market for Islamic finance in ASEAN. Between 2010 and 2014, Islamic banking assets in Indonesia grew from USD8 billion to USD22 billion or 29.2% CAGR. Moving to Brunei, the Sultanate’s early entry into the Islamic financial services market has provided it with strong foundation to develop the industry, and carving out a niche for itself as an international Islamic banking center. Islamic banking in Brunei is worth USD6.3 billion.
Islamic finance has also growing presence in the ASEAN muslim-minority countries such as Singapore, Thailand the Philippines where the demands for Islamic financial services are emerged. Singapore as a financial center has shown sign to further boost its Islamic finance regime. Islamic banking assets in Singapore have grown by 73% since 2010, and are increasingly cross-border in nature. Similarly, Thailand occupies the second largest Muslim population in ASEAN accounted for USD3.8 billion Islamic banking assets. Penetration Islamic finance in Philippines occurs in capital market. Recorded 61 out of 306 stocks on the Philippines Stock Exchange are shariah-compliant as of 2015.
The coming together of ASEAN Economic Community (AEC) as big agenda in ASEAN could be triggered potential growing of Islamic financial market. Many issues have to shared related to this condition. To responses, we aim to conduct ASEAN Islamic Economics Summit 2017 in which will accommodate the ideas of ASEAN youth for better Islamic Finance on their region and to be a platform to exchange knowledge about Islamic Finance. Furthermore, they will also be given an opportunity to enhance their understanding and knowledge about ASEAN society with the purpose to direct them to be the next global leader in Islamic Economics fields.
- Islamic Economic Summit (Call for Essay)
Islamic Economic Summit will be held in campus auditorium along with fellow local students or international studies who have an interest in all three sub-themes that will be discussed. Some of best chosen papers will have opportunity to present their papers to be discussed together so all participants could gain more insights with those topic discussions.
• Regionalization of Islamic Banking
Islamic banking integration is an integral part of AEC agenda. Islamic banking industry in each ASEAN country will have to face challenges, adapt to demand and make the necessary adjustments to ensure that the banking industry can take advantage of a number of new opportunities. It is expected that Islamic banking in ASEAN will be able to provide banking products and services not only to Muslims but also to non-Muslim customers. Islamic banking in ASEAN needs to be revamped especially in liberalization initiatives, financial-inclusion programs, human capital development and product innovation.
• Integration of Islamic Capital Market
In an Islamic capital market (ICM) market transactions are carried out in ways that do not conflict with the conscience of Muslims and the religion of Islam. Here, there is assertion of religious law so that the market is free from activities prohibited by Islam such as usury (riba), gambling (maisir) and ambiguity (gharar). The growing awareness of and demand for investing in accordance to Islamic principles on a global scale has created a flourishing Islamic capital market, more so today due to increasing wealth in the hands of muslim worldwide who are actively involved in corporate and business activities. The ICM also plays an important role in generating economic growth for the country. The ICM functions as a parallel market to the conventional capital market, and also plays a complementary role to the Islamic banking system in broadening and deepening the Islamic financial market.
Therefore, the need for long-term development for the Islamic capital market so that it has a role in an investment and minimize risks such as the default risk in the future. In addition to long-term development, capital markets must also have the support of the Government in order to make product innovation published by the capital market can be applied as well as published by the investor.
• Human Resource Development on Islamic Economics
In the globalization era, the competitions among companies are increasingly intense. To attract the costumers’ heart, the human resources need to be creative and innovative in developing and introducing the products. Therefore, the human resource management and the development of professionalism are perceived crucial in nowadays business, including in Islamic financial industries. In this case, the Islamic economic products offer new insight in business transaction, where the activities are in accordance with Islamic principles. However, the numbers of people have less information about the running of Islamic economics. To this point, the human resource development on Islamic economics is highly needed.
- Campus Tour
Campus Tour is designed for participants to visit some renowned university majoring in Islamic Economics in Malaysia, one of which is International Islamic University Malaysia (IIUM) as the best Islamic Economics major among ASEAN, located in Kuala Lumpur. This program includes library visit and other provided campus facilities as well as discussion with campus representatives to have more information about further scholarships and study opportunities.
- Company Exploration
Company exploration invites participants to visit several Islamic Economic institutions such as Busasila, banking industry or capital market in Malaysia to learn more about the company’s work in promoting Islamic economic growth for improving nation’s economic growth.
- City Excursion
City challenge will be the one of the memorable activities for participants because they will go to some tourism places in two cities of Malaysia (Melaka and Kuala Lumpur).
WHO SHOULD ATTEND
- Shariah scholars and advisors
- Professor & academics
- Senior representatives of multilateral bodies and policy making, stakeholder & infrastructure institutions
- Business specialists – business professionals in industrial sectors and financial institutions
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